The latest report from Carbon-Free Europe assesses Europe’s progress towards carbon neutrality as it works to become carbon neutral by 2050. Here, the organisation’s Co-Founder, Lindsey Walter, discusses the findings in greater detail.
Following the launch of the European Green Deal and the Paris Agreement, Europe’s progress towards carbon neutrality includes reaching ambitious goals as it works to become climate neutral by 2050. Such policy includes a focus on climate action, clean energy, sustainable industry, buildings and renovations, sustainable mobility, eliminating pollution and more.
However, with 2050 edging closer and recent societal events putting even more pressure on the energy sector, is Europe doing enough to reach its decarbonisation goals at a sufficient pace? A recent study by technology-inclusive climate initiative Carbon-Free Europe (CFE), carried out in partnership with research and consulting firm Evolved Energy Research, set out to address this question.
Carbon-Free Europe’s latest Annual Decarbonisation Perspective (ADP) provides annual insights into Europe’s progress towards carbon neutrality by using cutting-edge energy systems models to evaluate the latest changes in energy policy and technology costs. This year’s study also incorporates the implications of Russia’s invasion of Ukraine and the subsequent energy crisis, as well as shedding light on the impact of EU clean energy policy, such as the Fit for 55 package and REPowerEU.
The Innovation Platform spoke with Lindsey Walter, Co-Founder of Carbon-Free Europe, to gain a deeper insight into the study’s findings.
Can you tell us more about the Annual Decarbonisation Perspective and how it was compiled?
The ADP, a joint study between Carbon-Free Europe and Evolved Energy Research, is an energy systems analysis that evaluates a wide range of net-zero scenarios for the EU and UK to better understand what technologies, supportive infrastructure, natural resources, and investments are necessary to facilitate Europe’s progress towards carbon neutrality by 2050.
The analysis allows us to evaluate the impact of the latest policy developments and better understand what needs to happen next to stay on track for climate targets.
Results, both EU-wide and for individual Member States, can guide investment planning for capital-intensive businesses, point out critical gaps in research and development, quantify potential land use and socioeconomic transition challenges, clarify the risks of over-relying on specific technologies, and help focus the energy policy debate on relevant questions.
This analysis uses the EnergyPATHWAYS and RIO modelling platforms, widely recognised as best-in-class, along with the most current technology cost and performance data. It provides hourly resolution for electricity supply and demand to better represent a reliable, fully-decarbonised energy system. The study includes a geospatial analysis to identify land and marine areas available for wind and solar deployment.
What are the key takeaways from the ADP?
1. Recent climate policy, including the Fit for 55 and REPowerEU, has laid the groundwork for the EU’s ability to quit Russian natural gas in the near term. This year, we added a physical representation of the gas system to show exactly where gas supply comes from (imported liquefied natural gas (LNG), domestic LNG, Russian imports, other pipeline imports, and zero-carbon gas). This allows us to confirm that the finalised Fit for 55 files and REPowerEU are sufficient for phasing out Russian sources.
- Ukraine can become a unique contributor of both clean electricity and hydrogen to the rest of Europe, adding almost 100 GW of new wind and solar by 2050, or almost 20% of today’s EU renewable capacity. This year, we included an analysis of Ukraine’s renewable resource potential to better understand how it can fully integrate and contribute to Europe’s progress towards carbon neutrality.
- Technology-inclusive policies decrease the EU’s dependence on energy imports. As opposed to today, a carbon-free EU would produce most of its energy domestically. Therefore, the clean energy transition inherently increases energy security. However, scenarios that exclude carbon capture and storage, nuclear, and biomass result in larger amounts of imported energy.
- The EU will need to build new infrastructure – electricity grids, hydrogen pipelines, and CO2pipelines – at unprecedented rates to sustain a clean energy economy, requiring faster siting, permitting, and financing of projects. CFE’s model sees an increase of up to 170% in terms of inter-regional electricity connections, and the development of networks that can deliver up to 100,000 tonnes of H2 and 450,000 tonnes of CO2 daily across country borders.
- Some countries will max out the usage of their renewable resource potential, underscoring the importance of long-term planning for resource constraints and land availability. Our study includes analysis of land availability, energy quality, and economic potential for different clean energy resources. Especially when it comes to onshore wind, some countries will be highly constrained with physical space. With solar, some countries may still have physical space but will reach the limits of their economic solar resource potential. This finding reinforces the need for integrated network planning, as well as supporting the development of alternative technologies.
Our study also has takeaways on a technology-inclusive hydrogen strategy, our first-of-a-kind analysis on the potential of innovative direct air capture technologies, the importance of encouraging flexibility in Electricity Market Design reform, investment planning for existing and innovative technologies, and guidance for Member States as they finalise their National Energy and Climate Plan revisions.
What do the findings indicate about Europe’s progress towards carbon neutrality?
The existing regulatory framework on Europe’s progress towards carbon neutrality lays a great foundation to achieve the required emissions reduction by 2030. Our analysis considers binding policies, including the Emissions Trading System, REPowerEU, the Energy Efficiency Directive, Renewable Energy Directive, REfuelEU, FuelEU, Effort Sharing Regulation, LULUCF, CO2 for cars and vans, and Energy Performance of Building Directive as well as non-binding policies with the hydrogen strategy, EU Offshore Strategy, REPower EU communication, and EU Solar Energy Strategy.
However, fully decarbonising by 2050 is a different challenge. Beyond 2030, our scenarios diverge considerably depending on their unique assumptions or limitations. The more constrained the scenario (e.g. limited renewable development because of supply chain or permitting constraints, slow adoption of electrification across transport, building, and industrial sectors, or no new nuclear energy build), the less likely the scenario is to succeed in reaching carbon neutrality. To maximise the likelihood of achieving a net-zero trajectory, policymakers must concentrate on near-term policies and the funding tools necessary to deploy key 2030 technologies like renewables, electric vehicles (EVs), and heat pumps, all while supporting technology research, development, and demonstration (RD&D) and policy frameworks that can contribute to ‘last mile’ emissions reductions on a net-zero pathway.
While it varies depending on the scenario, through 2050, the EU will need over €1,200bn for offshore wind, €1,200bn for solar, €280bn for storage, €890bn for nuclear energy, €96bn for e-fuels, €355bn for electrolysis hydrogen production, €28bn for advance geothermal, and €177bn for decarbonised steam – just to name a few key technologies. While much of this can come from private investment, this demonstrates the enormous financial strategy needed to complement the existing progress towards Europe’s carbon neutrality.
What do you think needs to be resolved and what actions need to be taken to achieve this?
Deep decarbonisation is an enormous infrastructure challenge, so let’s look at the numbers. We need to build new clean energy projects and supportive infrastructure at a pace we have not achieved before.
While across our scenarios, overall energy consumption decreases by almost a third, the electric grid needs to increase by 2.5 to 4 times today’s capacity to accommodate for the electrification of buildings, transport, and parts of industry. We need to replace over 250 million internal combustion engine (ICE) vehicles with electric vehicles and replace almost 400 GW of residential heating stock with heat pumps. District heating systems reliant on fossil fuels need to switch to carbon-free heat sources like nuclear or use larger heat pumps.
By looking at Europe’s progress towards carbon neutrality, it’s clear we need more than 1 TW of new solar, 400 GW of new onshore wind, and 300 GW of new offshore wind, along with almost 200 GW of electric storage. In addition, we need an increase in overall nuclear generation by the 2040s, with the replacement of existing generators as well as expansion into new geographic areas.
Integrating and delivering this scale of new generation requires a significant buildout of new transmission. This includes reinforcement of the existing EU and UK networks as well as, in the long-term, accessing new resources from resource-rich areas like Norway, North Africa, Ukraine, and Turkey. It took Europe 100 years to build the current roughly 1,000 GW of grid capacity and now we need to more than triple it in 27 years. That essentially means tripling capacity in a third of the time.
Rivalling the scale of electricity transmission, an extensive pipeline network will be needed to transport around 100,000 tonnes of clean hydrogen by 2050. Clean hydrogen will be important for decarbonising parts of the transport sector, like shipping, and industrial sectors, like iron and steel. It will also become important for producing e-fuels and periodically balancing the grid. A significant backbone of this hydrogen transport system will be up from the Iberian peninsula and down from the Nordic countries to Germany, which is a significant consumer of hydrogen in the long term but has limited ability to produce domestically due to constrained renewable potential.
By 2050, we also anticipate capturing carbon at almost 440 million tonnes of CO2 per year, of which approximately 10% is utilised to create zero-carbon fuels and 90% is geologically sequestered. This requires creating significant transport infrastructure to deliver captured carbon to sequestration sites.
Can we achieve all this? Absolutely. But it will require building supply chain and manufacturing capacity, unlocking significant public and private finance, rapidly training a clean energy workforce, empowering Member States to pursue technologies depending on their unique needs, collaborating across regions to bring down costs, and maintaining political support for durable climate policy.
What do you predict for the future of Europe’s energy systems?
If Europe can achieve a carbon-free energy system, then it will also have a more affordable, reliable, and secure energy system. Achieving climate targets requires a clear understanding of resource, economic, technological, and social risks. Pragmatic, data-driven conversation around the likelihood of accomplishing various pathways is essential for smart policymaking.
By not just leaving the door open to all clean energy technology, but actively investing in the innovation and deployment of a diversity of solutions, we can excel in Europe’s progress towards carbon neutrality and become a global example of how to reach net-zero while advancing energy security and economic goals.
Please note, this article will also appear in the fifteenth edition of our quarterly publication.
